As financial markets react to the weaker-than-expected 142,000 gain in non-farm payrolls during August,
Douglas McIntyre of 24/7 Wall St. offers a sobering thought.
"One of the open questions about the recovery is when the jobless rate will return to the 5 percent or less that signals a full recovery. It may not happen at all, or at least not for years," he writes.
The jobless rate stood below 5 percent from May 1997 through October 2001 (under Presidents Clinton and George W. Bush) and again from June 2005 to February 2008 (under Bush). Unemployment stood at 6.1 percent in August.
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The Congressional Budget Office doesn't expect a dip below 5 percent at least through 2017 and forecasts an average annual rate of 5.5 percent from 2018 through 2024.
"So, it can be argued that 5 percent or lower unemployment is no longer the benchmark of a healthy economy, at least in the United States," McIntyre argues.
What will keep the jobless rate high? "Among the [reasons] are age, education and location," McIntyre writes.
Unemployment is particularly high for the young, the less-educated and those in urban areas, he explains.
Some economists view the August jobs report as an anomaly after six straight months of job gains exceeding 200,000.
"The shortfall in payrolls is disappointing, but it sure looks like a fluke, not a trend," Diane Swonk, chief economist at Mesirow Financial, tells
Bloomberg.
"It gives [Federal Reserve Chair Janet] Yellen a little wiggle room to do what she wants to do, and that is end the tapering and not start raising rates anytime soon."
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